Cooper Tire & Rubber Co. reported first-quarter 2003 net income of $15 million, a 42% drop compared to the same period a year ago.
The company's net sales of $795 million were also down comparatively; in the first quarter of 2002, Cooper reported $813 million in sales.
Net sales for Cooper's tire operations also were down in the first quarter, from $433 million in 2002 to $396 million this year. Total unit volume for the tire division declined 11% during the quarter.
First-quarter operating profit for Cooper-Standard Automotive was up 8% compared to last year.
"Our automotive operations continued to perform very well," says Tom Dattilo, Cooper's chairman, CEO and president. "Our committment to the customer and technology that solves the customers' needs, while making sure we are as lean as we can be, is paying off.
"On the other hand, the North American tire industry continues to face several difficult factors in the current environment. Light vehicle unit shipments were down over 6% in the quarter as retail demand remained soft.
"Raw material prices were much higher than a year ago and continued to climb throughout the quarter," he says. "Energy costs had a negative impact on production costs as well as transportation expense. This combination made operating conditions very difficult during the quarter."
Looking ahead to the second quarter, Dattilo says tire industry conditions probably will remain tough, raw material prices will continue to increase, and tire demand is likely to remain soft.
"Some of our OEM automotive customers have announced production cuts in the coming months, and that will have some impact on Cooper-Standard Automotive. But we anticipate that new business at Cooper-Standard will maintain our sales for the coming months." (The division has been awarded more than $55 million in net new business since Jan. 1.)
Dattilo says Cooper is optimistic about its opportunities in the second half of the year. "Raw material prices should begin to come down, and tire demand should improve significantly, as pent-up demand is converted into sales."
He adds Cooper will see increasing results from its new high performance tire initiatives.
